In Budget 2023, the announcement of a national supply chain strategy with strategic trade corridor investments is encouraging for Canada's semiconductor industry and national interests. US President Joe Biden's visit to Ottawa was significant for Canada and its semiconductor industry, as part of a larger semiconductor manufacturing trade agreement or "corridor" that is great news for Canadian innovation.
Semiconductors are vital for powering computers, smartphones, electric vehicles, healthcare, and cleantech devices. There are significant challenges in the global semiconductor space, including the disruption of global supply chains during the COVID-19 pandemic and the strained relationship between China and the West.
Canada's semiconductor industry is driven by design and development work, with substantial capacity in design, build, and testing of semiconductors in Canada and the northeastern US. CMC Microsystems is the national leader in supporting design and fabrication of semiconductor devices for Canadian and international entrepreneurs and researchers. Canada is known for high value-add, innovative technologies such as exotic compound semiconductors that are essential for high power applications such as EV charging and solar power converters.
The US and New York State, in particular, are accelerating semiconductor production with the CHIPS and Science Act, which includes over $52 billion for semiconductor manufacturing, R&D, and workforce development, with an additional $24 billion of tax credits for microchip production. Micron has committed to building a $100 billion megafab near Syracuse, while GlobalFoundries is modernizing its Burlington, VT plant to produce next-generation compound semiconductor chips that Canadians excel at designing.
To remain competitive in this rapidly expanding ecosystem, the Government of Canada and Canadian firms need to act now. Canada needs to further develop its expertise in designing microchips that will be manufactured in the corridor. This means continuing to train Highly Qualified Personnel in Canadian universities, developing them in national companies and research institutions, and retaining them to ensure that the intellectual property they produce benefits Canada.
Canada has to send a clear message that it will invest in Canadian suppliers and be key players in the semiconductor corridor to foster prosperity and security for all Canadians, just as it did in the Oshawa-Oakville-Windsor-Detroit auto corridor. Semiconductors are the foundation of technologies powering electrification, autonomous driving, and connectivity of the auto industry.
